Global Fraud Footprint

African corruption prevalent, but we see rays of hope

March/April 2018

ByLiseli Pennings, CFE

In this new column, subject matter experts analyze fraud causes and remedies in regions and countries around the globe. — ed.

Och-Ziff Capital Management, an American hedge fund, had high aspirations to invest heavily throughout Africa. Apparently, it tried to accelerate its natural resources’ deals and other investments by paying more than $100 million in bribes to government officials throughout Africa. However, the U.S. Department of Justice slammed the door on the hedge fund’s African goals. On Sept. 29, 2016, Och-Ziff admitted to its role in several Africa bribery conspiracies and agreed to pay a $213 million criminal fine.

“Och-Ziff, one of the largest hedge funds, positioned itself to profit from the corruption that is sadly endemic in certain parts of Africa, including in Libya, the Democratic Republic of the Congo, Chad and Niger,”
said U.S. Attorney Robert L. Capers at the time of the verdict. “Despite knowing that bribes were being paid to senior government officials, Och-Ziff repeatedly funded corrupt transactions.”

Africa’s environment promotes corruption because of its reliance on skimming, bribes and asset misappropriation within governments that are ineffective and can’t provide services and resources to their populations.

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